Jobs and Business

Debate between Stephen Metcalfe and Liam Byrne

Friday 10th May 2013 Commons Chamber

[Mr Byrne]

My hon. Friend is absolutely right, and that was outlined very well in today’s newspapers by the former Chancellor of the Exchequer. At a time when we are struggling to grow our export base, why on earth would we choose voluntarily to put in jeopardy our membership of the world’s largest free trade zone?

The challenge is not simply that global demand conditions are weak—the Business Secretary said as much in his New Statesman essay—but that our exporters are losing market share. The Prime Minister is fond of telling us that we are in a global race, but the problem is that we have stalled on the starting grid. He is instead locking us into a race to the bottom, with a policy that will deliver nothing better than low growth, low skills and a low-wage future.

Those are the challenges that the Queen’s Speech should have addressed—the investment crisis on the one hand and the jobs crisis on the other—but there were big holes where the Bills on promoting investment and growing jobs should have been. Let us start with the investment crisis. The Breedon review showed some time ago that SMEs in our country confront banks that are deleveraging on a scale unseen anywhere else in Europe. The country’s investment rate is now under 15%. It is flatlining and well below the levels seen elsewhere in Europe. Business investment is £11 billion lower than it was during the peak before the crash, and there is falling investment in the venture capital industry, which is £80 million down on the latest set of figures.

Meanwhile, in corporate bank accounts cash is piling up. It is what the incoming Governor of the Bank of England, Mark Carney, has criticised in Canada as the phenomenon of “dead money”. Dead money is piling up in bank accounts in this country because the business community does not have confidence in the Government’s economic plans, yet all we got in the Queen’s Speech was a carry-over Bill on bank reform. As the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) said, that will probably not unlock the kind of business and banking investment we need. The Chair of the Treasury Committee has criticised the Bill because he found the Government’s arguments insubstantial. We did not get answers to Britain’s investment crisis in the Queen’s Speech, which is why it is such a wasted opportunity.

The wasted opportunity on jobs is perhaps more serious. Unemployment today is 90,000 higher than it was at the general election. There is simply not enough work to go around. Once upon a time we were promised a welfare revolution, and no doubt it was well intentioned, but the Work programme is not delivering for those who need jobs or those on employment and support allowance. I look forward to some reassurance from the Secretary of State when he responds. Universal credit, again, was a good idea, but if its virtues are confined to 300 citizens in Tameside, I am afraid that it will not revolutionise the back-to-work business here in Britain.

Perhaps worst of all, the Secretary of State stands before us today as a man who has failed the test he set himself in Easterhouse. Unemployment on three quarters of our worst estates is going up, not coming down, and long-term unemployment is going up on two thirds of those estates. Three years into this Parliament, that is simply not good enough, and it is not good enough that there was nothing in the Queen’s Speech to fix it.

[Stephen Metcalfe]

The right hon. Gentleman makes an interesting point about rising unemployment on some of our estates. Does he not accept any responsibility for failing to give those people the skills they need to access the opportunities that do exist across our economy? I think that is why some people on our estates are, unfortunately, finding it so hard to get the employment opportunities that do exist.

[Mr Byrne]

Apprenticeships quadrupled during our time in office. In the decade before the crash, we achieved rising productivity and rising wage growth. That is why wages were so much higher when we left office than when we began. Because we invested in skills, our record on rising wages was beaten only by Ireland and Australia. The Government should be building on that record, not watering it down.